ITT Tech Closes Its Doors Following Government Ban On Enrolling Fed Loan Students

The decision impacts thousands of students and employees nationwide.

ITT Technical Institute, a national chain of for-profit schools, announced on Tuesday that it would close more than 130 facilities, the company said in a statement.

“We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution,” the ITT Tech press release said.

This move comes in response to the U.S. Department of Education banning ITT from enrolling students who get federal aid, in an effort to protect students and taxpayers.

“In recent years, ITT Educational Services, Inc. has increasingly been the subject of state and federal investigations and this year it has twice been found out of compliance with its accreditor’s standards,” the department stated.

The Education Department has cracked down on career colleges that it suspects of enrolling students through misleading claims about job prospects. ITT Tech and other for-profit colleges have been criticized for charging high tuition, but failing to provide a high-quality education—leaving students with huge student loan debt.

ITT Tech accused the Education Department of violating its due process. The company also blamed the department of causing 8,000 employees to lose their jobs and displacing thousands of current students.

Reuters reported that ITT Tech relies on students who receive federal financial aid. Those students accounted for more than two-thirds of the company’s revenue in 2015.

The Education Department said ITT students may be eligible for a closed school loan discharge. The department noted that its decision about ITT Tech does not diminish the value of the degrees earned at the institution. Its action against the company is based on operational and financial risk—not fraud.